Legislation of the Commission, Subject of Principal 138 of the Constitution

In His Name

Peace be upon the Holy Prophet and His Descendents

Ministry of Economic Affairs and Finance

On the strength of the Article 138 of the Constitution of the IRI and in view of the legislation No. H41633T/186084, dated January 3, 2009, Ministers, being members of the Workgroup for the Legislation of the Bylaws related to the Law on Implementation of General Policies of Article 44, approved in 2008, legislated the Executive Bylaw of Article 7 of the aforementioned Law as detailed hereunder:

Chapter 1: Definitions:

Article 1) Terms and expressions used in this Bylaw have the following meanings:

A)Law: the Law on Implementation of General Policies of Article 44 of the Constitution.

B)Bodies subject of the Executive Bylaw: Ministries, state owned enterprises and companies, subject of Article 4 of the State Public Auditing Act, approved in 1987, and the executive bodies, SOEs, and profit making enterprises, affiliated to the state, to which the general laws and regulations shall be applied only if their names are mentioned, including the National Iranian Oil Company, and its affiliated SOEs, other SOEs related to the Ministry of Oil and their affiliated SOEs, Iranian Industries Development and Renovation Organization and its affiliated SOEs, the Iranian Mines and Industries Development and Renovation Organization, Central Bank of the IRI, State Owned Bank, and State Credit Institutes, city Islamic councils, municipalities, associations and guild unions.

C)Applicant: Iranian or non-Iranian real or legal persons, who apply for the issuance of Licenses for economic activities and or different affairs related to it from the bodies, subject of the Executive Bylaw.

D)Investment Headquarters: The Headquarters, subject of Note 2 of Article 7 of Law and the Body for the examination of applicants objections throughout the province.

E)Board of Examination: The board for the examination of complains of applicants at the ultra-provincial level and being formed by the deputies of Ministries of Industries and Mines, Agricultural Jihad, Home, Labor and Social Affairs, Commerce, Cooperative, and Iran Environment Protection Organization, headed by the Minister of Economic Affairs and or his deputy.

G)Executive Secretariats: Secretariats resided in the Organization, responsible for holding the meetings and examinations, subject of Note 2 of Article 7 of Law, drawing up of minutes of meetings and legislations, preparing necessary reports and drafting Guidebooks.

H)Guidebook: Investment guidebook, including conditions, documentations and the process of issuance of permits for the economic activities targeting at the facilitation of regulations and removal of unnecessary permits, which are published each six months by the Ministry of Economic Affairs and Finance (Organization) and shall be the only documentation for the determination of situation of the applicants’ investment in economic activities.

I)Board of Supervising: The Board, subject of Note 4 to Article 7.

J)Absolute Majority: Positive votes of the half of the participant representatives with the voting right plus one.

K)Economic Activities: Activities subject of Article 2 of the Law.

L)Permit: Permits for economic activities and related subjects, such as agreements, issuance of licenses, operation permits, and permits for entitlement to governmental and public services, conclusion of contracts with the applicant by the Bodies, subject of this Executive Bylaw.

Chapter 2: Facilitation and Speeding Up of Issuance of Permits

Article 2) Included organizations are bound to ask for documents and information from applicants only when they are licensed based on rules and legal ratification. Issuance and specification of any license by included organizations which have not received any legal order or cabinet approval is forbidden and mentioned organizations are not permitted to issue decree in this regard.

Those included organizations which need legal orders or cabinet ratification to issue the mentioned permits should refer to supervisory board; they are also obliged to act as below with the intention to facilitate and accelerate issuance of permits.

A)Formulate the processes for the issuance of permit in a manner that within 10 days of the collection of the application or registration of the same in the database, the applicant receives the response.

B)Regulations applicable to the issuance of permits shall be revised, amended, deleted and or formulated in a manner that the within the duration provisioned in the aforementioned law (10 days for giving response to the applicant and one month for the issuance of the permit), the necessary permits for the starting of activity and or the economic activities are obtained.

C)Enlist the required documentations and subsequent measurements for obtaining the permits in their databases.

D)Explicitly define the processes of issuance the permit and related expenses and provide the applicants through the official announcements and in their databases.

E)In case the response to the applicant is positive, following the collection of complete documentations within one month, the permit shall be issued in a manner that the applicant does not need any other permits for economic and business activities.

F)Submit the information required throughout the entire investment process for the issuance of permits, sorted by type, location, and time of activity, as well as the particulars of the responding individual, and signed by highest ranking authority of the Body, subject of Executive Bylaw, to the Executive Secretariats for drafting the Guidebook.

G)In order to facilitate the process of issuance the permit, take due measure for the establishment, promotion, and or updating the database and use of proper software in a manner that the applicant can electronically mange the processes resulting in the issuance of permit and necessary follow up activities.

H)Where different permits are needed for an economic activity, each of the related Bodies, shall be required to take due measures in a manner that the time needed for the obtaining of necessary permits does not exceed the provisioned time limits.

I)Within 3 months of the notification of this Bylaw, operate the electronic database.

J)For granting the permit, only request the documentations or conditions stated in the Guidebook from the applicant and avoid requesting items of documentations exceeding the predetermined ones.

Note: The highest ranking authority of the executive Body, subject of this Bylaw, shall be responsible for the satisfactory performance of the Body.

Article 3) The Bodies, subject of this Executive Bylaw, shall be required to revise every six months (not later than June 21, and December 21 of each year), the process or issuance of permits and or other necessary measures for the transpiring the conduct of economic activities, targeted at the facilitation of regulations and removal of unnecessary permits and send the results of revisions and final information to the Executive Secretariat.

Article 4) Authorities responsible for the issuance of permits for economic activities shall be required to state the information related to the issued permits and units active in each business in their database and inform the Executive Bylaw of the matter every six months.

Note 1: The Executive Secretary shall be required to state the information received from the Bodies, subject to the Bylaw in their database.

Note 2: Investment Headquarters shall be required to provide the Executive Secretariat with the information related to the permits issued in the Province for the registration in the national database established in the Organization.

Chapter 3: Investment Headquarters and the Board of Examination

Article 5) If any of the Bodies, subject of the Executive Bylaw, fail to fulfill its obligations within one month of the collection of the complete documentations and documents of settlement of the required amounts of money, shall request for an extension from the Investment Headquarters or the Board of Examination.

Article 6) If agreeable, the Investment Headquarters or the Board of Examination may extend the time needed for the issuance of the permit for one month and only once.

If the reasons of the requesting Body is not satisfactory for the Investment Headquarters or the Board of Examination, the documentations of the applicant shall be returned to the related Body to issue the necessary permits within one month.

Article 7) In order to receive, register, and examine the complaints of the applicant and reporting to the Investment Headquarters or the Board of Examination, the Secretariats of the Headquarters in the Governor- Generalship and the Secretariats of the Board shall be formed in the Organization.

Note: The Secretary of the Board of Examination shall be the Organization President and the Secretary of the Headquarters shall be the President of the Provincial Organization of Economic Affairs and Finance.

Article 8) The Investment Headquarters shall be required to provide the Executive Secretariats with a report on the decisions and judgments made.

Article 9) In order to receive, register and examine the objections of the applicant for obtaining the permit from ultra-provincial Bodies, the Board of Examination shall be held in the MEAF. The Secretariats of this Boar shall be established in the Organization.

Article 10) Meetings of the Investment Headquarters and the Board of Examination shall find quorum with the presence of two third of the members and its decision shall be valid with the absolute majority of the votes of participants.

Article 11) The President of the Investment Headquarters or the President of the Board of Examination may invite representatives of the private sectors, governmental bodies, which are not members of the Headquarters, and independent experts for collecting their consultative opinions in the meetings.

Article 12) In case of objection of the applicant to the negative response of the Body, subject of the Bylaw, or its failure to fulfill its obligations within the provisioned time limits, the Investment Headquarters or the Board of Examination shall be required to examine the issue and make due decision in the framework of the regulations of the Bodies, subject of the Bylaw (stated in the Guidebook), within fifteen days of the collection of the objection.

Article 13) The Secretariats of the Headquarters and the Secretariats of the Board of Examination shall be required to take necessary measures for the collection, registration, and responding to the objections of the applicants through electronic methods.

Article 14) The Secretariats of the Headquarters and the Executive Secretariats shall be responsible for the drafting of the minutes of meeting and the notification to the related Bodies, authorities and applicants of the legislations, signed by the Secretary of the Headquarters and the Director of the Board of Examination.

Article 15) In order to speed up and facilitate the processes for the issuance of permits and helping the Bodies, subject of the Bylaw, in the fulfillment of their obligations explicated in the Bylaw, the Executive Secretariats shall be required to establish a comprehensive databank, using the information collected from the Bodies, subject of the Bylaw.

Chapter 4: Guidebook

Article 16) The Executive Secretariats shall be required to integrate, control and supervise the publication of the final information sent by the Bodies, subject of the Bylaw in the Guidebook and put them in the database in Persian and English and revise the same every six months.

Article 17) In order to establish a unit process and integration of the information required to be put in the Guidebook, the Bodies, subject of the Bylaw shall be responsible to take due measures for the preparation of standard forms, proper for any type of economic activities.

Note: If requested by the Executive Bylaw, the Bodies, subject of the Bylaw shall be responsible to announce the authorities for the issuance of permits at the provincial and ultra-provincial levels for the publication in the Guidebook or the database to the Executive Secretariats.

Article 18) In order to prepare the information provided in the Article 2 and the carrying out of necessary coordination with the Executive Secretariats, the Minister and or the Highest Executive Authority of the Bodies, subject of the Bylaw, shall be required to determine the necessary specialized executive unit.

Note: The Unit determined shall be responsible to continuously send to the Executive Secretariats, the finalized information, after informing the Minister or the highest ranking authority of the Body to be put in the Guidebook.

Chapter 5: Board of Supervision

Article 19) The Board of Supervision shall be required to take effective, fruitful and on time supervising measures, for deregulation, facilitation of conditions for the issuance of permits and licenses to practice economic activities and if necessary, draft the concerned bills and submit the same to the Board of Ministers.

Note 1: In order to apply its supervising authorities, the Board may obtain necessary information through different methods such as requesting reports, sending representatives to the Bodies, subject of the Bylaw and giving representation to the reliable persons. Following the analysis of the information acquired, the Board may make corrective recommendations to the Bodies, subject of the Bylaw. The Bodies, subject of the Bylaw shall be responsible to apply the corrective recommendations of the Board of Supervising within ten days and announce the results of the same.

Note 2: All the Bodies, subject of the Bylaw shall cooperated with the Board and send to the Board the requested information and in case of failures in this regard, the violators shall be subject to Article 85 of the Law and the report shall be submitted to the Highest Ranking Authority of the Body. In case the concerned body, fails to take due measures, the Board shall inform the disciplinary, and administrative authorities, as well as the President of the Country.

Article 20) In order to revise and correct the process of issuance permits and or other requirements resulted from the Law and its Executive Bylaw, the Bodies subject of the Bylaw shall be required to send their recommendations to the Board of Supervising for any amendments and legislation, in case the process of issuance of permits necessitates the legislation of the Board of Ministers and or other authorities.

Note 1: If the issuance of permit for an economic activity depends on the payment of expenses, the Bodies, subject of the Bylaw shall submit the required suggestions for minimizing the expenses to the Board of Supervising.

Note 2: In case the real or legal persons, consider the laws and regulations of the Bodies, subject of the Bylaw regarding the conditions for the issuance of permits and licenses as redundant and inappropriate, they may inform the Board of Supervising of the matter.

Article 21) Secretariat of the supervisory board will take up position in the office of related Vice Ministry of Economic Affairs and Finance.

Manner of establishment and administration of meetings of the Board of Supervising, requires the full description of its responsibilities in view of the Directive, which shall be approved by the Board of Supervising.

Article 22) Members of the Board of Supervising shall be determined following the recommendation of the Minister of Economic Affairs and Finance and the approval of the President of the Country.

Chapter 6: Promotion of the Business Context

Article 23) the Bodies, subject of the Bylaw, shall be required to take necessary measures for the promotion of the Iranian international ranking in business, in the manner provisioned in this Bylaw. The Organization shall be required to provide these bodies with international information and standards regarding the aforementioned ranking, so that they gear their cooperation with the Organization in line with the international information and standards.

Article 24) The Organization shall be required to examine the performance of each one of the Bodies, subject of the Bylaw in the way of promotion of the Business Context in Iran and the promotion of its international ranking in this regard, and report the results to the Board of Supervising.

Chapter 7: General Regulations

Article 25) In order to correct the processes for the issuance of permits, the Bodies, subject of the Bylaw shall be required to carry out the diagnosis, subject of this Bylaw annually, based on the scientific studies and conduct expert studies, and report the results to the Executive Secretariats.

Article 26) In order to establish a precedent, concentration and integration in regard to the provision of required information to the foreign investors in the Country, Foreign Investment Service Center, subject of Chapter Four of the Executive Bylaw of theLaw of Promotion and Protection of Foreign Investment approved in 2002 and the Provincial Organizations of Economic Affairs and Finance, only the Bodies, responsible for informing in regard to the foreign investment shall be the competent authorities to be called on by the foreign investment applicants.

Article 27) In case of failure of the Bodies, subject of the Bylaw to issue permits in view of the time limits provisioned in Article 2 of this Bylaw, the Investment Headquarters or the Board of Examination shall examine the violation(s) of the authority(ies) of the Bodies, subject of the Bylaw or introduce the violating individual(s) to the Board of Administrative Offences, approved in 1993.

Article 28) To accelerate and facilitate license issuance for economic activities, organizations under this article are permitted to cede their full or a part of their obligations to qualified legal individuals in the private and cooperative sectors. These individuals are bound to observe rules of Article (7) of the act and bylaw. Regulations and conditions on methods of establishing and activities of legal entities as well as evidences of their violations and executive guarantees will be approved by the supervisory board under note 4 of article 7 of the mentioned act.

Article 29) Conditions and process of deregulation, and issuance of different permits shall be in a manner that the acceptance of the IRI in the WTO results in the speeding up of affairs in the production, business, and investment structure and economic activities of the Country.

Article 30) Necessary resources and credits for the establishment of the Executive Secretariats, publication and updating of information in the Guidebook by the Organization and the budget required for the activities of the Board of Supervising, shall be annually predicted and recommended to the Department of Strategic Planning and Oversight of the President.

Article 31) The Minister of Economic Affairs and Finance shall be required to submit the report of executive measures taken in view of this Bylaw to the President every six months.

Article 32) Regulations stated in the legislations of the Board of Ministers for facilitation and speeding up the investment and issuance of permits for economic activities for nongovernmental sectors in authorized areas, which are in contradiction to the provisions of this Bylaw, shall be terminated as of the date of notification of this Bylaw.